It has gone from a household name which dominated its market to a struggling firm unable to pay its bills. But why is Bernard Matthews failing?

The sale of Bernard Matthews this week has raised many questions, not least from creditors owed thousands of pounds and workers concerned about their pensions.

But one over-riding concern is what this once-great Norfolk name must do to return to profitability – and what lessons it can learn from its decline.

The Great Witchingham-based turkey giant was transferred to the Boparan Private Office, the investment company headed by 2 Sisters Food Group entrepreneur Ranjit Singh Boparan, in a pre-pack administration deal which was finalised on Tuesday.

The company said it wanted to 'make Bernard Matthews great again' following a period of falling sales and financial losses.

Bernard Matthews' annual accounts tell the story of the slump – from the 2012 optimism of achieving a 'strategic vision of doubling turkey consumption in the UK by 2020', to the sombre tone of the following year, when 'the performance of the UK business was very unsatisfactory due to a combination of factors including significant increases in feed costs, the impact of poor wheat quality following the very wet conditions in spring and summer 2012, which had an adverse impact on bird performance, and issues caused by over-stocking as the UK business increase production in anticipation of sales that did not arise.'

In fact, as feed costs eased in subsequent years, the demand still did not appear, and in January this year, Bernard Matthews posted pre-tax losses of £5.2m for the year to June 28, 2015, as sales fell by £30m to £276m.

And that could be symptomatic of wider problems in the sector.

According to figures supplied by the National Farmers' Union (NFU) turkey meat production in the UK has fallen by 35pc since 1994, while broiler chicken production has increased by 45pc during the same period.

Turkey poult placings have continued on a downward trajectory, falling by over 14pc in August 2016 compared with the previous year, forcing turkey meat production down by 6pc in January-August 2016.

Gary Ford, NFU chief poultry adviser, said this was due to a dwindling consumer demand in the UK, where turkey is still seen as a seasonal meat, and so struggles to compete with chicken.

'These production figures go a long way to painting the picture of why it is a challenging time for the turkey industry,' he said. 'The big competitor for turkey meat is chicken, but there is also competition from cheap imports of turkey meat from Italy and Poland.

'Turkey meat struggles to compete with chicken, as both are affordable, healthy and versatile, so it needs to be innovative when trying to take market share from chicken. It can compete, however, with red meat on price, health and versatility.

'What the turkey sector needs to do in my opinion is promote itself as an all-year-round, healthy affordable source of protein. The reason our consumption figures are very poor compared to other countries around the world is because we focus on turkey as a seasonal dish rather being a healthy all-year-round protein of choice.

Mr Ford said the average UK consumer eats 4kg of turkey per year, compared to 6.1kg in Germany, 5.3kg in France, 7.9kg in the USA.

'Traditionally we are not big consumers compared to those other countries,' he said. 'We are in love with chicken meat all year round, but we are only in love with turkey at Christmas.'

Outgoing owners Rutland Partners said it had nothing further to add to its statement on the deal, in which it said it was disappointed at the business's performance but pleased that 2,000 employees' jobs would be preserved.

Chef's view: Re-branding needed

Norwich chef Richard Bainbridge, of Benedict's restaurant, agreed that re-positioning its product, and keeping up with consumer trends, would be crucial for Bernard Matthews' new owners.

'For the hospitality and the food service industry, it is like fashion,' he said. 'We have to move with the times and reinvent ourselves constantly. Food trends change constantly and if you don't keep up with the times you are nowhere. As a company they should re-brand and go down a different line. But in that stoic Norfolk way they stuck to their guns.

'Bernard Matthews has got a great product. We produce the best turkeys in the country in Norfolk and it is one of the leanest meats going. So if they had gone down the that route, to emphasise what a great healthy product it is, they would not have been in such a position.

'The recent re-brand looked like it was trying to appeal to a 1940s housewife, but people are not like that any more. People want an ethical product, a local product and a healthy product. If we have got a company who can wave a flag for Norfolk and be proud of it they have got the product there, they just need to mix it up a bit and show you can have a healthy lifestyle with it, and sell it to the public.'

A turbulent time

Bernard Matthews' problems date back a decade, to 'turkey-twizzler gate' in 2005 – a PR disaster sparked by celebrity chef Jamie Oliver's move to rid school dinners of the company's processed meat products. And an avian flu outbreak in 2007 dealt a huge blow to profits after thousands of birds had to be destroyed.

The company came close to collapse in 2013, axing dozens of jobs, but current owners Rutland Partners stepped in to rescue the business, giving it a £25m cash injection. But the turnaround plan has had little effect. A bid to remind customers of its 'bootiful' roots and win over mums across the country saw a rebrand in 2015. But its turnover has continued to drop and the company was put up for sale in June 2016.